Technical change, markup, divestiture, and productivity growth in the U.S. telecommunications industry

M. Ishaq Nadiri, Banani Nandi

    Research output: Contribution to journalArticle

    Abstract

    This paper examines the sources of productivity growth for the U.S. telecommunications industry from 1935 to 1987. These years encompass both the pre- and post-AT&T divestitureperiods. We formulate a structural model that accounts for both changes in the cost and the demand side of the industry. We measure the contributions of aggregate demand, information intensity of the economy, price-cost margins, relative factor prices, direct and indirect effects of technological progress, and R&D investment on total-factor productivity (TFP) growth rate. We show that TFP growth rate as conventionally measured is a seriously biased measure of rate of technical change in this industry.

    Original languageEnglish (US)
    Pages (from-to)488-497
    Number of pages10
    JournalReview of Economics and Statistics
    Volume81
    Issue number3
    DOIs
    StatePublished - Aug 1999

    ASJC Scopus subject areas

    • Social Sciences (miscellaneous)
    • Economics and Econometrics

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